Condo alerts

By Vern McClelland

June 22, 2017 12:00 AM

There's more than meets the eye when considering a condo purchase

Purchasing a condominium can be a great housing solution for many different buyers, not just first-time home owners looking to build equity instead of paying rent.
Single parents often find a sense of community within a complex once they get to know their neighbours resulting in new friendships, even short-term assistance with child care.
Mature adults see condos as a way of becoming free of exterior maintenance chores, while retaining the independence and privacy of their own unit.
Many snowbirds love the fact they can come and go from their residence throughout the year without worrying about security of their belongings.
And of course, investors see these units as a relatively easy property to manage, with the power bill being the only concern beyond choosing a good tenant and collecting the rent.
However, prospective buyers should not go into purchasing a condo unit without a significant amount of diligence.
When you buy a condominium unit, you become a shareholder in the ownership of the entire complex, from the parking lot right up to the roof.
Whether it be of relatively new construction or a converted apartment building, the responsibility of ownership cannot be denied.
So, don’t just be swayed by how the unit you’re interested in presents itself, look deep into the financial and structural well-being of the property.
The first, and most obvious step, is to walk around to see how well it’s currently being maintained.
If there are unrepaired potholes in the parking lot, electrical wires hanging out of the plug-ins, uncut grass, oil stained hallway carpeting, etc., then right from the outset you know not enough attention is being paid to upkeep by the resident owners.
It’s like denying your fiancé has an addiction problem and thinking that will be resolved once you get married.
As a condo purchaser, you agree to become part of this community, for better or worse.
But there simply is no need to be buying into a problem plagued facility.
Assessing the financial health of the condominium corporation should be your highest priority.
Realtors attach a schedule to a offer outlining all the documents the owner must provide for review by you and your lawyer.
These include minutes of board meetings, financial statements, a capital reserve fund study, insurance certificates, and a statement that outlines whether the seller is up to date in paying their condo fees and special assessments, if any.
Has there been a recent capital reserve study, professionally completed, that outlines what major expenditures are anticipated and the amount of funds on hand to meet the estimated costs?
If you’re not satisfied with the information given you, don’t buy in.
Honestly, too many condominium complexes don’t have an adequate reserve fund, and if faced with a roof repair or leaking balconies, would be unable to effect repairs without asking all unit owners to pay their share in a lump sum.
Some condo owners try to duck this responsibility by putting their units on the market, hoping an unsuspecting buyer will step up before the funds are due.
One complex in the city assessed its unit holders upwards of $50,000 to address significant safety issues in the structure.
There really was no choice.
The operating budget had been kept too low for too long.
Then there are the simple, yet important, questions; for example, can I bring my small dog with me?
Don’t assume that’s allowed just because you see one in the hallway when viewing the unit for sale as the bylaws may have changed after that pet and its owner became resident.
The other is to confirm the actual size of the unit to what you are being told by the seller, ensure the location of the assigned parking stalls and if they are outside, are they electrified?
Ask to view the storage unit if there is one.
Make sure all of these details are in the offer.
Not written, not done.
Most important of all, I encourage my buyers to talk to several of the current unit owners and see what they say about the state of affairs within the complex.
There is nothing better than the insight gained from someone already on the inside.
Vern McClelland is an associate broker with RE/MAX of Lloydminster. He can be reached at (780) 808-2700, through www.vernmcclelland.com or by following the Midwest Group Lloydminster on Facebook.

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